Sugar Tax and Truth Decay

Alice has been carefully reading the raft of press releases issued by the soft drinks industry and their PR machinery, responding to the recently announced Sugar Tax. All the industry players claim compassionate concern for the cost impact on consumers, which is nice of course, but Alice’s attention was drawn to the following quote by Jon Woods, the general manager of Coca-Cola UK & Ireland, writing in the Daily Telegraph:

“There is no reliable evidence from anywhere in the world that shows taxing food and drink – let alone just some soft drinks – has changed people’s behaviour and made them thinner.”

This argument has been repeated, in terms, by most major manufacturers of the sweet stuff in what is most certainly a concerted effort. It almost (but not quite) dwarfs the response of my favourite PR guru, Gavin Partington from the BSDA (British Soft Drinks Association) who activated his PR lexicon and eloquently described the proposed sugar tax as “absurd”.

But let’s look just a little deeper into what Coca-Cola are really saying here:

that increasing the price of an item will not change buyer behaviour, and they will not reduce their consumption levels.

and that therefore they will not lose weight

Now Alice considers herself something of an authority on the science of Denialism, but has never witnessed such an ignorant and curt dismissal of the “Law of Supply and Demand” along with 250 years of micro-economic theory, beginning with Adam Smith’s ‘Wealth of Nations’ (published in 1776). The simplified essence of this law states that as prices rise, consumption falls, and vice-versa. Coca-Cola are claiming that the Law of Supply and Demand does not exist by citing there is “no reliable evidence” of its existence.

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There are one or two rare exceptions to this golden rule, including of course addictive drugs. A price rise here usually results in increased petty thefts to raise the required funds whilst demand remains static. I doubt that Coca-Cola would accept this as a fair comparison to their own sticky elixirs, but Alice does find the conjecture an interesting one.